GE Medical launches digital cardiac, mammo systems

Palatin Technologies halts merger plan with Molecular Biosystems

Palatin Technologies Inc. (Princeton, N.J.) in March halted its proposed acquisition of Molecular Biosystems Inc. (MBI of San Diego). The merger was proposed Nov. 12 and called for MBI shareholders to receive 0.525 shares of Palatin common stock for each share of MBI stock.

MBI makes the ultrasound contrast agent Optison, which would have been Palatin’s first FDA-cleared and marketable product. Palatin Chairman, President and CEO Edward J. Quilty said several developments led Palatin to reconsider its position.

First, he said, Palatin has made significant progress in recent months with its own products, lessening the company’s desire to acquire an existing marketable product. Palatin filed its license application with the FDA for LeuTech, a monoclonal antibody for imaging infection sites, on Feb. 23, with hopes to have approval to market the product in October or November. Palatin has a worldwide distribution agreement with Mallinckrodt Inc. (St. Louis) for LeuTech.

Research into its second product – PT14, a treatment for male sexual dysfunction – is progressing better than anticipated, Quilty added. The company hopes to submit an application to the FDA in June for permission to begin clinical trials.

Those announcements have affected positively the value of Palatin stock in recent weeks, increasing the share price to the $7 to $8 range. On the other hand, because of the higher price, Palatin would lose more in the proposed stock-for-stock transaction with MBI. Palatin officials estimated it would have cost the company roughly $80 million to purchase MBI.

“On the other side of the equation, we learned a lot more about the Optison product that we were acquiring from MBI,” Quilty said. “We still think it’s a good product, but the market may not accept that product as quickly as we had originally thought.”

Quilty also said several unresolved intellectual property issues surrounding Optison left Palatin unsure of its potential for revenues. MBI is involved with several legal disputes regarding the patents for Optison.

“When we looked at what we were paying for that product – $8 per share or about $80 million – it was the decision of myself and the members of the board that the benefit of making that acquisition was not in our best interest,” Quilty added.

Exiting this deal doesn’t mean Palatin isn’t looking at other acquisitions that could provide marketable products and revenues for the company. “We’re still very interested in looking at other products,” Quilty said. “If we decide to raise some more equity and the markets continue to be good, that’s what we’d use the money for – to look for additional products and technologies.”

Imagyn receives 510(k) for expanded biopsy indications

The FDA has awarded Imagyn Medical Technologies (Irvine, Calif.) its 510(k) clearance for expanded indications for the company’s SiteSelect stereotactic breast biopsy device.

Previously cleared for incisional breast biopsy or the removal of a piece of abnormal tissue, the new indications state that the device “is intended to provide tissue for histological examination with partial or complete removal of imaged lesions.”

Imagyn originally received 510(k) clearance for the device’s incisional use in July 1998. The first U.S. sale of SiteSelect was in August of 1998. At that time, the company released the device to a limited number of sites and followed with full-market release in the spring of 1999.

SiteSelect consists of a reusable driver system that interfaces with the stereotactic imaging table and the disposable SiteSelect biopsy instrument. Incorporated into that is a localization needle and wire.

Once at the target, the device removes a single, contiguous core of tissue, preserving the lesion architecture and orientation for pathologic analysis. By sparing healthy tissue, SiteSelect can be less disfiguring to the patient. The device is controlled manually, which allows tactile feedback throughout the procedure. The device does not require motors, vacuums or electrocautery.

Harriet Schwartzman, director of marketing for Imagyn, said SiteSelect allows the physician to go in and remove a single large core of tissue, while preserving the healthy tissue in between the skin and the target. When the instrument is advanced into the breast up to the target lesion, it basically separates healthy tissue, instead of coring through it. Samples come out as a single piece intact with the lesion architecture preserved, as opposed to many small sample slivers, which can make it easier for pathology to make a diagnosis.

“They are able to get a sample that’s similar to what they get in an open biopsy in that it’s a single sample with the lesion architecture preserved, yet it is allowing the physician to do it in a less invasive manner,” Schwartzman said. “It is easier on the patient and it preserves more healthy breast tissue.”

SiteSelect procedures are done on an outpatient basis in one room, as opposed to two separate settings with the patient requiring local anesthesia. Schwartzman said the evolution of breast cancer diagnosis and management is continuing and the expanded clearance of the SiteSelect shows that newer devices are getting more expanded indications from the FDA.

“Basically, the whole market segment is continuing to focus on less invasive methods for diagnosis and treatment,” she added. “With these types of instruments and these procedures, like SiteSelect, it’s important that women understand and learn about all the options and the alternatives that are available to them when they are faced with a breast biopsy.”

Rorke Data signs to become part of Bell

Computer components firm Bell Microproducts Inc. (San Jose, Calif.) is looking to boost its European distribution through the acquisition of image storage equipment developer Rorke Data Inc. (Eden Prairie, Minn.).

The companies have signed a letter of intent and are performing due diligence on the acquisition. Financial details of the transaction were not disclosed.

According to Joe Rorke, vice president of marketing for Rorke, Bell is targeting companies that have geographical significance to them. Rorke’s European distribution and Dutch office appealed to Bell.

“They’ve made some acquisitions that have given them a good foothold in Canada and South America,” said Rorke. “They wanted to get a foothold in Europe, so we became a likely candidate because we have a strong office out of Holland that covers the entire European Community with about 60 employees.”

The deal comes after Rorke completed a major restructuring in late 1999, which involved the spin-off of its Flexstor.net business, a digital content and Web infrastructure business. Flexstor.net is not part of the acquisition.

In 1998, Bell reported $660 million in revenues. About 25 percent of Rorke’s business is medical, an area in which Bell is looking to expand, said Rorke. From Rorke’s perspective, the deal gives the smaller firm deeper pockets and the ability to open new offices domestically.

Rorke also hopes the deal will allow the company to expand its digital media division. Rorke sells approximately $3 million to $4 million a year in digital media to hospitals. He said the firm hopes to double that business through the increased distribution and production capabilities of Bell.

“Rorke will continue to provide a variety of software solutions that complement its storage solutions for vertical markets including reselling the Flexstor.db product,” he said.

Cedara teams with UCLA to develop cardiology workstation

Cedara Software Corp. (Mississauga, Ontario, Canada) is collaborating with researchers at the University of California-Los Angeles (UCLA) to develop a workstation aimed at bringing together all cardiac images and information onto one platform.

“Doctors find it extremely difficult to do a proper file review of a patient, since all the images are on different media and coming from different sources,” said Harold Wodlinger, business relations manager at Cedara.

By combining all imaging modalities in cardiology – such as MRI and ultrasound – with monitoring data, such as EKGs, the workstation will give the cardiologist one source for all information.

“Now, [doctors] have to gather cine film and video tapes and look at chart recorder paper, and they’d like a much more efficient way of doing this,” Wodlinger said. “Certainly, angiography, echo, MRI and CT are important, but we’ll also work to bring in X-ray chest films into the file. That is something that cardiologists need to look at, but right now have no access to, other than the film.”

The workstation will have full processing capabilities, in some cases, equivalent to primary modality acquisition workstations. In other cases, those functions may not be necessary. Wodlinger said complicated applications, such as pediatric cardiology, have driven the development of this product.

Cedara presented a prototype at last November’s meeting of the American Heart Association (Dallas). The project – “Integrated Multi-Modality Reporting and Conferencing Workstation for Cardiology” – is led by Osman Ratib, M.D., Ph.D., professor and vice chair of the department of radiological sciences at UCLA.

Wodlinger said Cedara expects to begin clinical use in the next year. There is no timetable for commercial release of the product.

GE OEC inks development pact with VTI

GE OEC Medical Systems Inc. (Salt Lake City) is partnering with image-guided surgery systems provider Visualization Technology Inc. (VTI of Wilmington, Mass.) to jointly develop intraoperative computerized navigation solutions for image-guided surgery applications.

The long-term, sole-source agreement includes GE OEC making a minority equity investment in VTI. According to Jonathan Lauer, director of marketing for VTI, the pact’s aims are being kept under wraps for now. He did say that GE OEC is “the leader in C-arm fluoroscopy and, in the OR, there is a lot of crowding of boxes and machines. An integration where you reduce the number of boxes in the room makes sense.”

VTI was established in 1993 and released its first product, the InstaTrak, in 1996. The company started in the ear, nose and throat specialty market and estimates that it holds 95 percent share in that market. VTI has since moved into the cranial, spine and orthopedic markets.

Lauer said that most image-guided surgery systems available today are based on optical tracking, which entails an infrared camera and LED array that facilitate the communication between the camera and the surgical instrument.

“Our technology is electromagnetic so there is no line of sight required between the instrument and the camera,” he explained. “In other words, the transmitter and the receiver can see each other without optical line of sight required. In an optical system, anyone in a crowded OR can block that path and it stops tracking the instrument and that’s not a problem with our system.”

OEC confirmed those thoughts in a prepared statement outlining the agreement. GE OEC CEO Joseph Pepper said that VTI will help GE OEC “find breakthrough solutions to aid the healthcare industry.”

The financial details of GE OEC’s investment in VTI were not disclosed. “All we can say is that it’s a minority equity investment,” said Lauer.

Computron Display Systems

? Founded in 1981

? Subsidiary of Xcel Corp. (Kent, England) 1985-1995

? Founders regained ownership of company in 1995

? Designs, manufactures and markets high-resolution, high-brightness monitors for the medical, industrial, military and telecommunications markets

? 80 percent of monitor business is in medical imaging

XiTec emerges from Chapter 11 with new plan

You’re nothing without a plan and mini C-arm provider XiTec Inc. (East Windsor, Conn.) has one. After filing Chapter 11 almost 11 months ago, XiTec completed funding of a reorganization plan in mid-September and is releasing information about its strategic direction.

The reorganization plan was made possible through an undisclosed investment from Medical and Technology Applications LLC (Great Barrington, Mass.), a group of investors making its first foray into the medical imaging field. Michael Sullivan, XiTec president and CEO, said the relationship is strictly financial and Medical and Technology Applications will have no day-to-day involvement in XiTec.

“Their intent is to help grow the business with acquisitions and perhaps tap into some relationships they have in other businesses, particularly in the international markets,” Sullivan said. Currently, XiTec sends 10 to 15 percent of its products outside of the U.S., particularly to Europe. XiTec is looking to export to other global markets, but is not providing details as to where it will focus those international distribution efforts.

On the product side, Sullivan told Medical Imaging that the company has “redirected the product line” in areas that market watchers may not expect. “We have some significant new product opportunities, which are going to be launched in the near term,” he added.

While he did not offer specifics, Sullivan said the new product lines may be a departure from XiTec’s traditional offerings, most notably mini C-arms.

XiTec will offer its high-voltage power supply and X-ray generator to companies on an OEM basis. Sullivan said the firm is close to signing its first agreement and is in talks with a few others. XiTec also is offering its products to the veterinary market and exploring other avenues offered by its investors.

GE Medical to buy Hungarian R/F company

GE Medical Systems (GEMS of Waukesha, Wis.) has signed a definitive agreement to acquire Medicor R?ntgen (Budapest), a manufacturer of radiology and fluoroscopy equipment.

The proposal is pending regulatory approval by Hungarian regulatory officials.Reinaldo Garcia, president and CEO of GE Medical Systems-Europe, said Medicor R?ntgen’s expertise lies in R&F medical imaging equipment, marketing primarily in Eastern Europe. He added that Medicor would be a “key element” in GEMS’ strategy to expand its range of products and services.

Financial details of the proposed transaction were not disclosed.

RSNA’s executive director dies

Delmar J. Stauffer, executive director of the Radiological Society of North America (RSNA), died March 1 of an apparent heart attack.

A native of Saybrook, Ill., Stauffer served as executive director of RSNA since 1989 and led the society’s expansion through the 1990s. Under his guidance, attendance at the annual RSNA Scientific Assembly and Annual

Meeting nearly doubled to more than 60,000 in 1999.

“Del came to the society when medicine was in turmoil with the advent of managed care and cutbacks in healthcare funding,” said Steve Drew, RSNA’s assistant executive director for scientific assembly and informatics.

Drew worked closely with Stauffer in his years at RSNA, saying, Stauffer “helped lead and strengthen the society and the field, fortifying the commitment to research and education, and raising the voice of radiology when it needed to be heard.”

Stauffer started his professional career as a high school science teacher in Highland Park, Ill., and moved on to become a university instructor. He entered the field of association management in 1970, when he took a position with the American Medical Association (Chicago). He later served as assistant executive director for the American Dental Association (Chicago) from 1978 to 1986 and as executive director of the Chicago Dental Society (Chicago) from 1986 to 1989.

Stauffer is survived by his wife, Mary, and two sons. Remembrances can be made to the RSNA Research and Education Foundation, 820 Jorie Blvd., Oak Brook, Ill., 60523-1860.

Biosound unveils next-generation ultrasound unit

Biosound Esaote Inc. (Indianappolis) has received FDA 510(k) clearance on its ultrasound system, the Technos.

Technos uses a fully digital beamformer and proprietary reprogrammable microchip circuitry. Technos’ new line of broadband curved and linear array multifrequency transducers – each weighing about four ounces – is designed to address abdominal, obstetric, small parts and vascular applications.

Dan Meibers, Biosound’s general imaging product manager, said Technos can visualize subtle vascular morphology and demonstrate very slow blood flow conditions.

The system features a non-interlaced SVGA monitor, with separate digital controls and operator-programmable pre-sets, reports and annotations, and multi-function keys make scanning.

Diffusion-weighted MRI helpful in stroke detection

A recent study presented at the American Stroke Association’s 25th International Stroke Conference in New Orleans brings light to the use of diffusion-weighted MRI imaging for detection of stroke.

Researchers at Stanford University (Palo Alto, Calif.) found that newer MRI scanners featuring diffusion capabilities can detect minor changes in the fluid of the brain and diagnose a stroke in as few as five minutes after the stroke begins.

“When a stroke happens, the blood clot blocks the vessel in the brain and damages a portion of the brain very early on,” explained David Tong, associate director of the Stanford Stroke Center. “When that damage occurs, the water content of the brain changes and this technique can detect that.”

Technically speaking, diffusion-weighted MRI imaging is not a new technique. Tong said it originally was developed in France more than a decade ago, but Stanford researcher Michael Moseley was the first to explore the technology to detect stroke.

The technique works by determining which tissue in the brain has been damaged by stroke and which tissue is untouched. When brain tissue is damaged, water molecules in the cells of the brain do not move, thus creating a much stronger signal than healthy cells that are moving or diffused. New, faster MRI scanners are much more sensitive to this activity and produce a more obvious, brightly lit image of the damaged areas.

Tong said that conventional methods of detection, such as CT or MRI, can detect these changes, but it may take 12 to 24 hours. That amount of time can be critical in administering the right medication for stroke treatment.

Researchers evaluated 39 patients.
“One of the most important questions we looked at is how practical is this technology for every day use?” Tong added. “We have a lot of technologies that give us nice, pretty pictures, but you don’t really need them to do your practice. Some people suggested this technology was in that category.”

The Stanford study tracked how often diffusion-weighted MRI changed the clinician’s diagnostic impression and the treatment of the patient. According to Tong, the MRI images changed diagnostic impression in 44 percent of the cases and changed actual treatment of the patient in 33 percent of the cases.

“We were surprised,” Tong said of the results. “We thought it would be more like 15 or 20 percent.”

Another aspect of the study that surprised the researchers was the usefulness of diffusion-weighted MRI in routine stroke cases. Not only did the technique prove beneficial in early detected cases, but it also was helpful in routine patients that were scanned 24 to 48 hours after the onset of stroke symptoms.

While the results are encouraging, Tong noted that the study, by no means, is definitive. Larger studies are planned, but may not materialize for some time. Tong said the Stanford research team wants to investigate the use of perfusion-weighted MRI imaging, which focuses on the blood flow in the brain using contrast agents.

Mecon OKs plan to join GE Medical

Shareholders at Mecon Inc. (San Ramon, Calif.) on Feb. 11 approved a proposal to become a wholly-owned subsidiary of GE Medical Systems (GEMS of Waukesha, Wis.).

Mecon shareholders received 0.081 shares of General Electric Co. (GE of Fairfield, Conn.) stock for each share of Mecon common stock, plus cash for fractional shares.

Mecon provides Internet-based benchmarking and cost management solutions for healthcare systems. The company’s line includes software products and consulting services designed to identify opportunities for improvements, correct problems and enhance performance within the customers’ companies.

Through Mecon, GEMS plans to create new Internet-based services in data-mining, benchmarking and consulting to help healthcare providers reduce costs and enhance the quality of care.

Masterplan scores with four-year Triad Hospital service contract

Masterplan (Chatsworth, Calif.) in February signed a four-year agreement with Triad Hospitals Inc. (Dallas) to provide asset management and equipment service to all of Triad’s 27 hospitals and 13 ambulatory surgery centers.

The pact to cover service on all clinical, medical imaging and biomedical equipment in Triad facilities becomes Masterplan’s largest asset management and service contract. The pact was effective April 1.

“In my view,” said Masterplan President Bruce Cree, “it is the largest [contract] ever signed by an independent service company. This is an important milestone for our company in its history.”

This agreement also will be the first time Masterplan has serviced any of Triad’s facilities. Masterplan replaces GE Medical Systems (Waukesha, Wis.) as Triad’s service provider.

“In most cases, we will have our employees located at [Triad’s] hospitals,” said Cree. “We will service the surgery centers on demand.” Cree added that Masterplan expects to hire “in excess of 40” new service personnel to help cover the Triad contract. Masterplan currently has approximately 400 employees.

In a prepared statement, Corris Boyd, Triad’s vice president of materials management, said the “savings offered by Masterplan, combined with the flexibility afforded by a vendor-neutral independent service provider, made the selection of Masterplan a perfect fit for Triad Hospitals.”

Triad’s facilities are located in 11 states, which include Arizona, California, Louisiana, New Mexico, Oregon and Texas. The company owns and operates the healthcare service business, which comprised the Pacific Group of Columbia/HCA Healthcare Corp. (Nashville, Tenn.). Columbia/HCA spun off Pacific Group in May 1999, marking Triad’s operation as an independent, publicly traded company.

Acuson’s Dugan steps down

Daniel R. Dugan, president and director of Acuson Corp. (Mountain View, Calif.), resigned from those positions effective March 1. Robert J. Gallagher returned from retirement to serve as interim president and COO, while Acuson seeks Dugan’s successor.

Dugan began his career at Acuson in 1984, serving for five years in various marketing management positions. In 1989, he moved to Toshiba America Medical Systems Inc. (Tustin, Calif.), but returned to Acuson two years later. In 1991, he became Acuson’s vice president of marketing and sales.

In 1993, Dugan was promoted to vice president of worldwide sales, marketing and service and was named president of Acuson in November 1997. In April 1999, Dugan assumed the management of all Acuson operations, when Gallagher retired as COO and vice chairman of the board after 16 years at Acuson.

Fuji Medical to move X-ray film unit to the U.S.

Fuji Medical Systems USA Inc. (Stamford, Conn.) is shifting its X-ray film finishing facility to the U.S. The parent company, Fuji Photo Film Co. Ltd. (Elmsford, N.Y.), has decided to expand its Greenwood, S.C., manufacturing facility to include the finishing process for its medical imaging films.

The new 100,000-square foot facility is under construction in Greenwood, as is a second color negative film manufacturing plant. Equipment for the plant is set for installation this summer. The $300 million expansion project brings the investment in the Greenwood facility to $1.3 billion in the past 11 years.

While the X-ray film still will be manufactured in Japan, the film will be finished, cut and packaged in Greenwood. Company officials say the new structure will speed market reaction time. “This will allow us to respond much more quickly to changes in customer demand,” said Clay Larsen, vice president of marketing and network development at Fuji Medical.

Fuji officials said the new facility shows its commitment to the U.S. market and reinforces its belief that X-ray film will remain in use for the foreseeable future.

“It’s not that we’re betting against departments going filmless,” said Larsen. “We’re investing in PACS and the filmless future. We think the PACS adoption rate will be strong, but its ability to make a dent in film consumption is still a number of years out.”

Larsen also commented on Fuji’s move to increase its 10 percent market share in the X-ray film market – a market he described as a “three-horse race.” “With the Agfa/Sterling and Kodak/Imation mergers this past year, you’re talking about a 45 percent, 45 percent, 10 percent split,” Larsen said, “I would see this as more of an aggressive optimistic approach to us increasing market share.”

Executives on the move

Siemens Medical Systems (Iselin, N.J.) named Nancy Gillen as vice president of its MR division. She has served as national sales manager for the MR division since 1995 and previously served as a product specialist for CT and MR at Siemens. She has been with Siemens since 1988.

McKesson HBOC Inc. (San Francisco) has a new CFO. William R. Graber has joined the company to become senior vice president and CFO from Mead Corp. (Dayton, Ohio), where he served as vice president and CFO. Graber replaces Heidi Yodowitz who has been acting CFO for the past eight months. She will return to her full-time job as senior vice president and controller.

Alliance Imaging Inc. (Anaheim, Calif.) has announced several promotions. The company named Lynne Eastman to senior vice president, responsible for sales and operations management in the eight-state Northwest region. Mark Hays has been promoted to regional vice president for southern California, southern Nevada and Arizona. He joined Alliance in 1989 as an MRI technologist and has held several management positions within the company. Shawn Smith has become regional vice president for Indiana, Kentucky, lower Michigan and Ohio. Smith previously served as CFO and vice president of sales and business development for eight years at the former Mid America Imaging Inc.

Marconi Medical Systems Inc. (Highland Heights, Ohio) has promoted C. Richard Hullihen III to vice president and general manager of radiology information services. Hullihen is responsible for creating Marconi’s information-based products and services for radiology-based customers and will oversee the company’s offerings in PACS, teleradiology and other image management services. Hullihen has served in a variety of U.S. and international positions in his 25 years at Marconi, most recently in corporate development for strategic planning and mergers and acquisitions.

Marconi also promoted Karl Wolcott to vice president and general manager of Marconi’s Picker Health Care Products (Mayfield Village, Ohio) business. Wolcott replaces Jerry C. Cirino, who was promoted to executive vice president of global sales and service for Marconi Medical Systems. Wolcott served as Marconi’s vice president of field operations.

Surgi-Vision gains distribution pact from GE Medical

It’s a small company with only one product to date, but it has caught the eye of major player in the medical imaging industry.

Surgi-Vision Inc. (Columbia, Md.) has signed a marketing and distribution pact with GE Medical Systems (GEMS of Waukesha, Wis.) for GEMS to distribute Surgi-Vision’s esophageal MRI coil with its MRI scanners. GEMS would use the MRI coil primarily with the GE Signa CV/i scanner, which is optimized for imaging the heart and blood vessels.
The technology for Surgi-Vision’s coils was developed at the Johns Hopkins University (JHU) School of Medicine (Baltimore) with the assistance of Elias Zerhouni, M.D., chairman of JHU’s Russell Morgan Department of Radiology.

Surgi-Vision received FDA 510(k) clearance on its Endo-Esophageal MRI coil (EEMRI) in September 1999. Since then, the company has been working on getting other products cleared and finding a suitable distributor for its product line.

“We looked at a number of distribution options from companies that are large to more mid-sized firms,” said Alan Sauber, vice president of operations at Surgi-Vision. “We’re a small company and we didn’t want to have to build a sales force. It made good sense for us to partner with someone who’s making advanced high-end machines of 1.5 Tesla and above.”

While GEMS’ distribution is worldwide, Sauber said Surgi-Vision is content to focus initially on the domestic market. A full-scale product launch of the EEMRI is expected later this year.

Surgi-Vision also is developing several other advanced MRI coils slated for release in 2000. A second esophageal product, the Stylet, has been submitted to the FDA for clearance. There are two guidewire products now under development – a peripheral vascular product and a coronary product. Lastly, there is a product for imaging the urethra and another for the prostate that is due out this year.

“I would say our first peripheral vascular product and our urethra product will be out this year,” Sauber said. “Our prostate product will be [out] this year. Our coronary product will take some more work.”

GEMS does not have exclusive rights to these works-in-progress, but Sauber said Surgi-Vision has a “certain obligation” to work with GEMS on distributing future products.

AID sells four IMIX DR suites to W. Va. center

Advanced Instrument Development (AID of Melrose Park, Ill.) has sold four IMIX digital radiography (DR) suites to Charleston (W.Va.) Area Medical Center (CAMC).

Two rooms were set for delivery in March, while the other two units will ship by the end of this year. CAMC, the largest healthcare provider in West Virginia, plans to become virtually filmless by this summer.

Each of AID’s IMIX digital radiography suites consists of a digital tilting wall bucky and a digital elevating float-top radiographic table. The X-ray generators and overhead tube supports are manufactured by Trex Medical Corp. (Danbury, Mass.), AID’s digital X-ray partner. The IMIX digital radiography technology uses a single 2K-by-2K matrix CCD for digital image acquisition. The image is processed at 16 bits, providing more than 65,000 shades of gray for contrast resolution.

AID’s IMIX system has received FDA 510(k) clearance for general radiographic examinations, including thoracic and all skeletal applications. There are more than 50 IMIX DR products installed around the world. All of the IMIX DR products are DICOM 3.0 compliant for network connectivity.

Local IMIX and Trex dealer AMIS Systems Inc. (Huntington, WV) will handle the deliveries to CAMC.

Sonus gives Abbott an out in U.S. distribution pact

Sonus Pharmaceuticals Inc. (Bothell, Wash.) has provided its U.S. distribution partner, Abbott Laboratories (Abbott Park, Ill.), with an option to exit the companies’ existing agreement.

Abbott has the option to terminate a deal to distribute Sonus’ EchoGen contrast agent, which is pending FDA 510(k) clearance. Sonus filed its FDA application in September 1996. “The discussions revolve around re-evaluating our restructuring and launch strategies with Abbott, as we hopefully approach marketing of the product,” said Sonus CFO Gregory Sessler.

Sessler said the initiation of these discussions stems from the length of time between the submission of EchoGen in 1996 and its FDA ruling. “Another aspect is another ultrasound contrast product that has been cleared by the FDA and is on the market since we’ve submitted,” Sessler added. “So, we’ve had the ability to watch the commercialization strategies relating to that product and learned what has worked in the marketplace and what hasn’t worked.”

Molecular Biosystems Inc. (MBI of San Diego) has received FDA clearance for its Optison and Albunex contrast agents. In November 1998, Bracco Diagnostics Inc. (Princeton, N.J.) became the first company to receive FDA approval to market an oral ultrasound contrast agent with its SonoRx product.

A decision from Abbott on the sales and distribution agreement was due March 31. The company may choose to either terminate the existing deal or restructure it. If the companies decide to continue the agreement, terms and responsibilities are expected by the end of April.

“If Abbott were to terminate the agreement, clearly we would either need to find a new partner or market and sell the product ourselves,” said Sessler. “If we market and sell the product ourselves, there is some loss to build that capability. On the flip side, under the current Abbott agreement, they have agreed to pay only a certain percentage of the sales, while if we market and sell the product ourselves, we would conceivably get all the sales.”

If Abbott backs out of the distribution deal, it will continue to manufacture EchoGen for two years following FDA clearance, but not later than July 1, 2002. At that point, Abbott would transfer manufacturing back to Sonus or to a designated third party.

In February 1999, Sonus and Abbott renegotiated the current U.S. arrangement to reduce royalty rates on the international sale of EchoGen and redefine U.S. and international milestones for payments to Sonus. Amendments were included to allow Sonus to request milestone payments in advance of milestones in exchange for Sonus stock.

In November 1998, the firms cancelled an international distribution agreement, which covered all non-U.S. countries with the exception of 10 Pacific Rim countries.

According to Sessler, Sonus is in discussions with European distributors, but no agreements have been signed since the termination of that deal more than a year ago.